The US government’s obsolete and dysfunctional spectrum management

6:12 PM 10/04/2012 | Opinion

Scott Cleland | Chairman, NetCompetition

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Radio spectrum is the by far the U.S. government’s worst managed resource. Shockingly in 2012, there remains no accountable federal manager of radio spectrum, despite spectrum being the 21st century’s most valuable natural resource and the essential fuel of the private sector mobile technology revolution of smart phones, tablets and the Internet of things.

Equally shocking is that the federal government’s spectrum inventory management system hasn’t changed materially since 1992, despite American wireless subscribers growing 3,000% from 11 million connections to 331 million, despite Congress revolutionizing the economics of spectrum by mandating public auction of spectrum to the highest bidder, and despite the exponential explosion of demand for wireless driven by: the Internet, smart phones, tablets, and video streaming technology.

Why is there no accountable federal manager of spectrum?

The basic legal authority for the federal government to manage the inventory of radio spectrum and assign who can use what radio frequencies for what use is obsolete. It hasn’t substantively changed since 1934, despite the advent of the TV, radar, microwave communications, satellites, cell-phones, the Internet, smart phones or tablets; and despite the fact that these technology changes have created vastly more private sector demand for radio spectrum than there is supply for private sector use.

The current Federal steward of radio frequency assignment authority is the low-level Office of Spectrum Management buried in the Office of the Assistant Secretary of Commerce for Communications and Information. While ostensibly it has the responsibility for “managing” the Federal spectrum inventory and assignments, it has minimal legal or delegated authority, power, or clout to actually efficiently or effectively manage the nation’s spectrum for the benefit of the Nation or the U.S. taxpaying public. In reality, they are a caretaker and bookkeeper of the nation’s spectrum, not a manager of it — no one is.

Since virtually all broadband-suitable frequencies have already been assigned to a government bureaucracy for free, the current ad hoc committee process of managing spectrum is dysfunctional, because it has those who already use the spectrum effectively deciding whether or not they have to give it up. Not surprisingly, any government entity that was assigned a valuable frequency for free in the past — long before spectrum became so valuable and scarce — is loathe to give it up. Moreover, they also appreciate that there is seldom anyone paying attention, which has the power to reassign it to a higher or better use.

To appreciate how backward and dysfunctional spectrum management is, consider that the management of all other federal resources were modernized long ago, and federal entities were empowered by Congress and the law to efficiently and effectively manage them.

To manage and conserve natural resources and federal lands, Congress created the Department of Interior in 1849. To more efficiently manage the federal workforce, Congress created the Civil Service Commission in 1883 and modernized it in 1979 as the Office of Personnel Management.

To efficiently manage costs and operations of gederal buildings, offices, and vehicles, Congress created the General Services Administration (GSA) in 1949. To efficiently manage government communications costs, the GSA created the Federal Telecommunications Service in 1960. And to efficiently and effectively manage most all of the nation’s resources (except radio spectrum), Congress created the federal Office of Management and Budget (OMB) in the Executive Office of the President in 1970.

Why is spectrum management so obsolete and dysfunctional?

Simply, there is no modern management of this resource or process. There is no coherent Federal policy that spectrum is a valuable scarce resource that needs to be conserved, well-managed and put to its highest and best use for the Nation and the American taxpayer. There is no formal annual spectrum budget process in the executive or legislative branch, where government spectrum holders have to justify their continued use of the spectrum, defend why they can’t share their spectrum with other bureaucracies, or why they can’t clear it for public auction.

There is no regular audit or accountability process to ensure that this valuable spectrum is being efficiently-used, fully-utilized and not wasted. There is no OMB-level review — independent of the departments and agencies that control the spectrum — to verify that it is being responsibly managed. There is also no required economic opportunity-cost analysis or cost-benefit analysis of Federal spectrum use.

As long as there is no requirement for government bureaucracies to pay annually for the value enjoyed from their spectrum use, like they have to pay for the energy, personnel and other resources that they use, spectrum will be managed in a dysfunctional manner and bureaucracies will not understand the alternative value this scarce resource has to the private sector. Simply, if a valuable scarce resource is perpetually free to use by a lucky select few, it will be wasted and hoarded.

In sum, the U.S. government’s system of managing spectrum is obsolete and profoundly dysfunctional. It is a scandalously backward, inefficient and unnecessary anchor around future U.S. economic growth, investment, productivity and innovation.

It is particularly ironic and hypocritical for the U.S. government to allege that the U.S. private sector is falling behind the world on broadband deployment when the government has fallen so badly behind the times and technology in managing its critical role in clearing Federal spectrum for auction and private sector use.

Who besides the government bureaucrats hoarding spectrum think it makes sense for the federal government to continue to control 85% of the nation’s radio spectrum suitable for wireless broadband, when the private sector uses 99% of the nation’s energy, provides 92% of the nation’s employment, produces 88% of the nation’s GDP, and owns 70% of the nation’s land? Who can defend this outrageously obsolete and upside-down public-private resource-use-ratio?

When will this most valuable 21st century resource finally get modern and accountable federal management as a full and integral part of the Office of Management and Budget’s and Congressional Budget Office’s management processes? When is the U.S. government going to wake up and take care of business?

Scott Cleland is Chairman of NetCompetition® a pro-competition e-forum supported by broadband interests and President of Precursor LLC, a research consultancy for Fortune 500 companies. He is also a former U.S. Deputy Coordinator for International Communications and Information Policy at the U.S. Department of State in the George H.W. Bush Administration.